duties of official 94. The official liquidator or liquidators shall be described Style and by the style of the official liquidator or official liquidators of the particular company in respect of which he is or they are liquidator. appointed, and not by his or their individual name or names; he or they shall take into his or their custody, or under his or their control, all the property, effects, and things in actions to which the company is or appears to be entitled, and shall perform such duties in reference to the winding-up of the company as may be imposed by the Court (a). (a) In the case of an unregistered company, a vesting order may be obtained; s. 203. a trustee for the creditors. The effect of a winding-up order is to constitute the official liquidator Liquidator is a trustee of the property of the company for the creditors of the company who were creditors at the time of the winding-up (see sect. 98). The order, therefore, prevents the Statute of Limitations from running against a creditor neglecting to prove his debt within the proper time (a). "There is by this section (sect. 98) imposed upon the assets of the company, wherever they may be at the time of the winding-up, a trust to be applied in discharge of the liabilities of the company" (b). (See, however, sect. 107, as to a creditor who does not prove within the time limited for that purpose.) from the liquidator. The official liquidator is in the position of a receiver and manager of Discovery partnership assets, appointed by the Court; and as an officer of the Court, his duty is to hold an even and impartial hand between all the individuals whose interests are involved in the winding-up. But, except where he represents the company as a party litigant, he cannot be called upon to make discovery at the instance of either creditors or contributories. By sect. 156 an order may be obtained for the inspection by the creditors and contributories of the books of the company, and it will be the duty of the liquidator to give to a person searching the books not only access, but every assistance and facility in finding out which are the relevant books and papers which he requires; but it is not his duty to search the books in order to make discovery at the instance of every person interested in every question arising. Thus where the question at issue is, whether the statutory requisites exist for placing a person on list B., and if so, what is the extent of his liability, this is a question with which the existing company has no concern, and the official liquidator cannot be called upon to make discovery in the matter (c). (a) In re General Rolling Stock Co., Joint Stock Discount Co.'s Claim, L. R. 7 Ch. 646. (b) Per Lord Cairns, Delhi Bank's Case (Albert Arbitration), 15 Sol. J. 923, 924; and see and consider Re Medical Trust Fund, 15 Sol. J. 840, where it was (c) In re Contract Corporation, Gooch's Case, L. R. 7 Ch. 207. Loans by liquidators. Powers of official liquidator. But where the official liquidator represents the company as a party litigant (since the company can only sue or be sued through his agency), as where there is in the winding-up a suit or a proceeding which is in substance, though not in form, a bill or action by or against the company, then the adverse party has a right to deal with the official liquidator as the litigant, and obtain from him the same measure of discovery in the same manner as he would from any other litigant— as e.g., where the proceeding is one by an alleged contributory for relief on the ground that he has been induced to become a shareholder by fraudulent misrepresentations (a). No liquidator ought ever to advance any of the moneys in his hands as liquidator upon loan or otherwise to make a profit thereby, such a proceeding is highly improper (b). 95. The official liquidator shall have power, with the sanction of the Court (a), to do the following things: To bring or defend any action, suit, or prosecution, or other legal proceeding, civil or criminal, in the name and on behalf of the company (B): To carry on the business of the company, so far as may be necessary for the beneficial winding up of the same (7): To sell the real and personal and heritable and movable property, effects, and things in action of the company by public auction or private contract, with power to transfer the whole thereof to any person or company, or to sell the same in parcels (8): To do all acts, and to execute, in the name and on behalf of the company, all deeds, receipts, and other documents, and for that purpose to use, when necessary, the com pany's seal: To prove, rank, claim, and draw a dividend in the matter of the bankruptcy or insolvency or sequestration of any contributory, for any balance (e) against the estate of such contributory, and to take and receive dividends in respect of such balance, in the matter of bankruptcy or insolvency or sequestration, as a separate debt due from such bankrupt or insolvent, and rateably with the other separate creditors: To draw, accept, make, and indorse any bill of exchange or promissory note in the name and on behalf of the com (a) In re Barned's Banking Co., Ex parte Contract Corporation, L. R. 2 Ch. 350. (b) Re Anon., 15 L. T. (N.S.) 170; and see Gen. Order, Nov. 1862, Rules 36-41. pany (5), also to raise upon the security of the assets of To take out, if necessary, in his official name, letters of To do and execute all such other things as may be necessary for winding up the affairs of the company and distributing its assets (0). (a) s. 96; Gen. Order, Nov. 1862, Rules 48-50. (B) s. 203, as to vesting order in case of unregistered company. (7) s. 153; et v. s. 131. (8) s. 161; Gen. Order, Nov. 1862, Rule 32. (e) See note to s. 75. () s. 47; Gen. Order, Nov. 1862, Rule 48. (n) ss. 76, 105. (0) See further, ss. 159-162. Where an unregistered company has no power to sue and be sued in Suit. a common name, a vesting order may be obtained under sect. 203; but the official liquidator may sue in his own name to enforce payment of a call by a contributory (a), and may sue in his own name on behalf of the company in those cases in which in a going concern two or three shareholders may sue on behalf of themselves and all other shareholders of the company other than the defendants; as where a suit is instituted against the directors to compel them to make good losses occasioned by their misconduct (b); and, semble, the sanction of the Court may be inferred from the general authority given to official liquidators on their appointment (and see sect. 96). (a) Turquand v. Kirby, L. R. 4 Eq. 123. (b) Turquand v. Marshall, L. R. 6 Eq. 112; Ibid. 4 Ch. 376. Admissions by official liquidator inadmissible. Sale. Bankruptcy. Bills of exchange. Discretion of official liquidator. An official liquidator stands towards the creditors and contributories in the position of a trustee, and has no power to bind by admissions his cestuis que trust. And, therefore, in a suit to set aside the amalgamation of two companies, it was held that the facts must be regularly proved, and that admissions by the liquidators were not sufficient (a). As to how far the Court has jurisdiction under this section to sanction the re-construction of a company by a sale of the assets to a new company, see In re Agra and Masterman's Bank (b), and In re Albert Life Assurance Co. (c); and see sects. 159, 160, 161, and Joint Stock Companies Arrangement Act, 1870, s. 2. In sanctioning a scheme of re-construction the Court will have regard to the wishes of a majority of creditors and shareholders deliberately expressed upon full information given, against the opposition of a dissentient minority (d). In the case of the bankruptcy of a contributory, who is also a creditor of the company, the debt must be set off against calls (e). In giving its sanction in respect of any of the acts specified in this section the Court will have regard, (i.) to the answer to the question whether the act, in respect of which its sanction is asked for, will or not operate to the prejudice of the estate; and (ii.) to the main purpose of the act, viz., the collection and distribution of the assets for the general benefit of the creditors, and amongst the creditors pari passu; exercising its discretion not for the benefit of any particular creditor, but for that of the general body of creditors interested under the Act. Moreover, by sect. 98, the first duty of the Court is to cause the assets of the company to be collected and applied in discharge of its liabilities. On these principles, then, the Court will empower the official liquidator to indorse bills in order to negotiate them. And where a company held bills accepted by A., payable in six months, and A. held dishonoured acceptances of the company, the official liquidator was allowed to negotiate A.'s bills; and it was held that A. had no present right of set-off, and no right to have the bills retained by the official liquidator until a right of set-off arose (ƒ). But where a company had entered into a contract for goods to be paid for by the acceptances of the company, the Court would not sanction the giving, by the official liquidator, of acceptances which would be worth nothing, but allowed the persons with whom the contract was made to prove for damages, the contract not having been completed (g). 96. The Court may provide by any order that the official liquidator may exercise any of the above powers without the (a) Re Empire Corporation, 17 W. R. (b) 15 W. R. 554; L. R. 12 Eq. 509, n. (d) In re Imperial Mercantile Credit (e) See s. 75, supra, p. 127. (f) Smith, Fleming, & Co.'s Case, Gledstanes & Co.'s Case, L. R. 1 Ch. 538; and see s. 158. (g) Ebbw Vale Co.'s Claim, L. R. 8 Eq. 14. sanction or intervention of the Court, and where an official liquidator is provisionally appointed (a) may limit and restrict his powers by the order appointing him. (a) s. 85. Whether or not a general sanction includes a power to compromise, Compromise. see Re South Eastern of Portugal Railway Co. (a). Compromises are properly dealt with by sect. 160; but whether an order to sanction a compromise be made under this section, or under sect. 160, there must be such evidence before the Court as will enable it to exercise a judicial discretion in the matter (Ibid.) 97. The official liquidator may, with the sanction of the Appointment Court, appoint a solicitor or law agent to assist him in the of solicitor performance of his duties (a). (a) Gen. Order, Nov. 1862, Rule 68, Form 12. It is an invariable rule that a liquidator who is a solicitor shall not employ his partner as his solicitor in the winding-up, unless he be willing to act without remuneration (b). Ordinary Powers of Court. to official liquidator. tion of assets. 98. As soon as may be (a) after making an order for Collection winding up the company, the Court shall settle a list of con- and applicatributories (3), with power to rectify the register of members in all cases where such rectification is required in pursuance of this Act (7), and shall cause the assets of the company to be collected, and applied in discharge of its liabilities (§). (a) s. 38. (B) s. 38; Gen. Order, Nov. 1862, Rules 29-31. (7) s. 35. (8) ie., as they exist at the date of the winding-up, ss. 94, 133. tributories. The list of contributories will consist of the A. list of present members, List of conand (if necessary) the B. list of past members, who have ceased to be members within a year of the commencement of the winding-up. As to the times at which these lists will respectively be settled, see sect. 38. The reference here made to a rectification of the register is not intended to enable the Court to rectify it ex mero motu suo, but means that the Court may exercise the judicial power conferred by the 35th section, having regard to who is the applicant and to all the circumstances of the case (c). After a winding-up order has been made, the power of rectification given to the Court by sect. 35 is not cut down and reduced to a mere Sichell's Case, L. R. 3 Ch. 119; (a) 17 W. R. 760, 809. (b) Re Universal Private Telegraph and see s. 35. Co., 19 W. R. 297. Rectification of the register; |